Income assessment to be individual, not as Hindu undivided family. Relief granted for 1952-53 assessment.

The court held that the income should have been assessed as an individual rather than as a Hindu undivided family. The appellant was granted relief for the assessment year 1952-53, with the court directing the rectification of the assessment by excluding the income of minor sons. The High Court's decision was overturned, and the appellant was awarded costs in both the Supreme Court and the High Court.

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Issues:
1. Assessment of income as Hindu undivided family or individual.
2. Application for rectification of assessment order.
3. Jurisdiction of the Income-tax Officer under section 35 of the Income-tax Act.
4. Discretionary power of the Income-tax Officer to rectify mistakes.
5. Entitlement to relief for the assessment year 1952-53.

Assessment of income as Hindu undivided family or individual:
The case involved the assessment of income for the years 1951-52 and 1952-53 of a Hindu undivided family comprising Hirday Narain and his sons. The issue arose when the Income-tax Officer assessed the income as that of a Hindu undivided family, even after a partition had taken place. The Appellate Assistant Commissioner directed the exclusion of a specific amount from the assessment, but the Income-tax Officer still assessed the income as that of a Hindu undivided family. The key contention was whether the income should be assessed as an individual or as a Hindu undivided family.

Application for rectification of assessment order:
Hirday Narain applied for rectification of the assessment order, claiming that the income assessed as a Hindu undivided family should have been excluded under section 35 as it was a mistake apparent from the record. The Income-tax Officer accepted that section 16(3)(a)(ii) did not apply to the income assessed as a Hindu undivided family but declined to give relief, stating that Hirday Narain should have been assessed as an individual for a specific period.

Jurisdiction of the Income-tax Officer under section 35 of the Income-tax Act:
The Income-tax Officer rejected the application under section 35, assuming the authority to modify the status of the assessee without giving an opportunity to establish the correctness of the original assessment. The court highlighted that the right to rectification could not be refused without investigating whether a mistake in fact was committed in the assessment.

Discretionary power of the Income-tax Officer to rectify mistakes:
The High Court erred in assuming that the Income-tax Officer had discretionary power to rectify mistakes under section 35. The court clarified that when circumstances for rectification exist, the officer is duty-bound to exercise the power to rectify an error apparent from the record, in aid of enforcing a right.

Entitlement to relief for the assessment year 1952-53:
The court held that the assessee was entitled to the relief claimed for the assessment year 1952-53. The appeals were allowed, and the High Court's order was set aside, directing the rectification of the assessment by deleting the income of minor sons included under section 16(3)(a)(ii) of the Income-tax Act. The appellant was awarded costs in both the Supreme Court and the High Court.

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